Example methods and systems for authentication for logical overlay network traffic are described. In one example, a first computer system may detect an inner packet and generate authentication information associated with the inner packet based on control information from a management entity. The authentication information may indicate that the inner packet originates from a trusted zone. The first computer system may further generate an encapsulated packet by encapsulating the inner packet with an outer header that specifies the authentication information, and send the encapsulated packet towards the second virtualized computing instance to cause a second computer system to verify that the inner packet originates from the trusted zone based on the authentication information.